Ship contract loss puts 5,000 jobs at risk

Fears are mounting for the jobs of 5,000 workers at Britain's biggest shipyard, at Barrow-in-Furness, Cumbria, following the Government's decision not to make it the prime contractor on the new "Batch Two" Trafalgar Class submarine programme.

The decision, announced just before the Parliamentary Christmas recess, has provoked real anxiety among the workforce at VSEL. Some workers have been informally briefed by junior managers to brace themselves for the worst and to try to find new jobs in the next two years.

But in a place as isolated as Barrow, that is easier said than done. Since 1990, VSEL, which is by far the largest employer in the town and in south Cumbria, has seen staffing levels plummet from 14,000 to around 5,000.

With work on the Trident submarines due to end in the next two years, speculation is growing that VSEL could be mothballed until new orders are secured.

A delegation of local town and county political leaders and trade unions returned to Barrow yesterday after hastily arranged private talks with Lord Weinstock, head of GEC, which bought VSEL last year. They were accompanied by John Hutton, Labour MP for Barrow and Furness, who described the meeting as "constructive".

Clive Kitchen, area official of the engineering union AEEU, also met Lord Weinstock. He said there were worries over the shipyard's short- term prospects. The awarding of the Trafalgars away from VSEL meant it faced a shortfall in new work, especially on the design side.

Even if Barrow wins the orders for the Royal Navy's new helicopter landing platform ship and the replacements for HMS Fearless and HMS Intrepid, there was still a possibly lengthy period during which no submarines or surface vessels would be built. The yard would be redoubling its efforts to secure orders for commercial vessels. "We need alternative work," Mr Kitchen said.

The contracts for the Trafalgars have gone to a consortium comprising GEC-Marconi, Rolls-Royce and AMEC. That successful bid was not as well advanced as VSEL's, and relied upon a completely different design. The GEC-Marconi plans were submitted before GEC bought VSEL.